Govt aims to reduce fiscal deficit to 3.8% of GDP

New sections in Finance bill FY17 will enable tax authorities to sign bilateral treaty with OCED

ISLAMABAD, Jun 4 (APP): The government aims to reduce the budget deficit from 4.3% of GDP during the current fiscal year (2015-16) to 3.8 percent of GDP in 2016-17.

Finance Minister Senator Muhammad Ishaq Dar, while addressing the post-budget press conference here Saturday said that through amendment in fiscal Responsibility and Debt Limitation Act 2005, the government is about to undertake two deep-rooted reforms in fiscal management system.

He said first, the government is putting a statutory limit on the credit of the federal government.

Starting 2017-18, in three years, the federal deficit would be brought down to 4% of GDP and thereafter to 3.5 percent.
Second, the debt to GDP ratio would be brought down to 60% of GDP in the next two years and then over a 15 years period, it would be brought down to 50%.

He said the tax revenues would be enhanced from Rs 3104 billion in 2015-16 to Rs 3621 billion in 2016-17.

The minister said that the government has continued focus on energy and around 10,000 MW of additional electricity will be generated by March 2018.

He said, for power, a total of Rs380 billion have been allocated in the federal budget.

The minister said that reduction in poverty and unemployment, cash transfers and stipend programme through Benazir Income Support Programme and Development and promotion of ICT sector, were among the priorities of the government.